QEP Bakken acquisition ignites more deal talk

Energy stocks curb losses for the week; DJIA up 100 in late surge

By

SteveGelsi

NEW YORK (MarketWatch) — QEP Resources moved up 6% Friday as a top leader among components in the S&P 500 index, gaining as the company moved to buy acreage in the Bakken shale for $1.4 billion, while the broad energy sector reversed course and rose to reduce losses for the week.

Flush with increased production to result after the deal closes as expected on Sept. 27, QEP Resources
QEP, -1.88%
lifted its 2012 target for earnings before interest, taxes, depreciation and amortization on an adjusted basis to a range of $1.4 billion to $1.45 billion, up from a prior estimate of $1.35 billion to $1.4 billion.

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At closing bell, QEP shares rose $1.62 to $28.80, their highest level since last month.

“The acquisition will add a new contiguous block of QEP-operated acreage in a localized ‘sweet spot’ for both the Bakken and Three Forks formations, as evidenced by above average well performance and estimated ultimate recovery from wells drilled to-date in both reservoirs,” said QEP CEO Chuck Stanley. “The acquisition meets our criteria perfectly.”

The acquisition of acreage from Black Hills Corp.
BHK, +1.69%
and Unit Corp.
UNT, -2.17%
also stoked speculation for other deals.

Gabriele Sorbara of Imperial Capital said “pure-play Bakken players” should be regarded as acquisition candidates.

Oasis Petroleum
OAS, +0.35%
and Triangle Petroleum
TPLM, +0.80%
appear to be among the most attractive candidates for prospective buyouts, Sorbara said.

The two oil majors are components of the Dow Jones Industrial Average
DJIA, -1.11%
which reversed course and rose 101 points after Federal Reserve Chief Ben Bernanke said the central bank has the means to take further steps to bolster the economy.

And among the major benchmarks used for tracking the energy sector, the NYSE Arca Oil Index (XOI) advanced 0.5% and the NYSE Arca Natural Gas Index (XNG) rose 1.2%. The Philadelphia Oil Service
OSX, -0.30%
edged up 0.1%.

Energy stocks lose ground for the week

The NYSE Arca Oil Index closed Friday at 1,231, below its ending point of 1,238 on Aug. 17.

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